TIDMMTR
RNS Number : 9334T
Metal Tiger PLC
25 March 2019
25 March 2019
Metal Tiger PLC
("Metal Tiger" or the "Company")
Botswana Copper/Silver Project - T3 Open Pit Reserve Increased
to 34.4Mt
Metal Tiger plc (AIM:MTR), the London Stock Exchange AIM listed
investor in strategic natural resource opportunities, is pleased to
provide an update on the substantial Ore Reserve upgrade for the T3
Copper Project ("T3"), held 100% by MOD Resources Limited ("MOD"),
in the Kalahari Copper Belt, Botswana following MOD's announcement
earlier today. Metal Tiger currently holds approximately 10.48% of
the issued share capital of MOD.
Highlights
-- T3 open pit Ore Reserve increased to 34.4Mt at 1.0% Cu and
13.2 g/t Ag (JORC 2012 compliant).
-- Ore Reserve contains 342.7Kt (approximately 756Mlbs) of
copper and 14.6 Moz of silver. Ore Reserves were calculated using
US$2.91/lb copper and US$16.81/oz silver price and average drill
hole spacing of 50m.
o 61% increase in total tonnage compared with the
Pre-Feasibility Study, announced January 2018.
o 57% increase in contained copper and 107% increase in
contained silver.
-- Open pit mine design in six stages, with 3Mtpa conventional
processing plant, provides a life of mine ("LOM") over 11 years,
with a LOM stripping ratio of 5.7:1.
-- T3 Feasibility Study ("FS") on track for completion at end of March 2019.
-- Infill drilling within the boundaries of the first two stages
of the proposed T3 Copper Project open pit is currently ongoing.
The 60-hole programme has the objective of upgrading early
production into the higher confidence, JORC compliant Measured
Resource category. Assay results for the first 11 infill holes were
announced 12 March 2019.
Michael McNeilly, Chief Executive Officer of Metal Tiger,
commented:
"We are very pleased to report the significant JORC Compliant
Ore Reserve upgrade for MOD's proposed T3 Open Pit mine project in
Botswana.
The upgrade constitutes a 61% increase in total tonnage compared
with the Pre-Feasibility Study, with a corresponding 342.7Kt of
copper and 14.6 Moz of silver, that should positively impact on the
already strong project economics. We look forward to the findings
of the T3 Feasibility Study which is expected to complete before
the end of this month."
This announcement coincides with MOD's announcement earlier
today which can be viewed through the following link:
https://www.asx.com.au/asx/share-price-research/company/MOD
T3 Open Pit Ore Reserve
The Ore Reserve estimate (JORC 2102 compliant) uses modifying
factors presented in the draft FS which is on schedule for
completion by the end of March 2019. The FS team consists of
independent external consultants and experienced MOD employees and
contractors. The components of the FS yet to be completed are not
considered to have a material impact on the Ore Reserve upgrade.
All modifying factors used for the Ore Reserve are within the
tolerances expected for a FS.
Ore Reserve Category Tonnes Copper Silver
(Mt)
Grade (%) Kt Grade (g/t) Moz
---------- ------ ------------ -----
Proven - - - - -
------- ---------- ------ ------------ -----
Probable 34.4 1.0 342.7 13.2 14.6
------- ---------- ------ ------------ -----
Total Ore Reserve 34.4 1.0 342.7 13.2 14.6
------- ---------- ------ ------------ -----
Notes:
1. The Probable Ore Reserve is based on the Indicated category
of the Mineral Resource. No Inferred category has been
included.
2. Proven Ore Reserves are expected to be defined following the
definition of a Measured Resource from the infill drilling
programme.
3. The lowest grade of ore added to the process plant feed in the FS is 0.22% Cu.
4. Ore Reserves are calculated based on a copper price of
US$2.91/lb and a sliver price of US$16.81/oz.
5. Ore loss and dilution were applied to the Mineral Resource
model in a two-step process which resulted in an ore loss of
approximately 9% and a diluted tonnage addition of approximately
8%.
6. Metallurgical testwork recoveries were applied in accordance
to the recovery algorithms developed from the variability testwork
programme conducted during the FS.
7. Appropriate modifying factors were applied.
Draft FS financial modelling, currently being finalised, shows
the project is economically viable under current assumptions and
within a range of reasonable sensitivities to the assumptions. In
the opinion of the competent persons ("CPs"), cost assumptions and
modifying factors applied in the process of estimating Ore Reserves
are reasonable.
Material mining, processing, infrastructure, economic,
commercial, environmental and social assumptions were considered
during the Ore Reserve estimation process. Individual CPs take
responsibility for these key areas.
Proposed T3 Open Pit
The proposed T3 open pit mine site is located approximately 80km
north-east of Ghanzi and 200km south-west of Maun, Botswana. The
proposed T3 mine and associated mining infrastructure lies within
freehold farm land within PL190/2008. MOD's in-country operating
company, Tshukudu Metals Botswana (Pty) Ltd has entered into a
binding agreement to acquire the 25km(2) area of the farm, which
will be the subject of a mining licence application expected in
mid-2019.
The Mineral Resource has been defined along an approximately
1.5km long strike length and the copper and silver sulphide
mineralisation occur in veins and disseminations within host rocks
that include mudstone, siltstone, sandstone and marl units
considered part of the D'Kar Formation.
Mineralisation is continuous along both strike and down dip
within the pit, dominated by chalcopyrite with chalcocite and
bornite copper sulphides occurring in lesser amounts.
Mineralisation extends from shallow depth (circa 25m depth) to the
limit of drilling to date at approximately 480m vertical depth.
The T3 mineralisation type is described as a sheeted vein
deposit dipping at 20-30 degrees to the northwest with varying
widths of disseminated mineralisation around the veins. The deposit
may represent multiple stacked, mineralised veins and units,
thrusted one upon the other.
This interpretation opens potential for resource extensions
along strike east and west, as well as at depth, below the pit and
down dip towards the north west. Drilling continues to test for
potential underground extensions at depth across the T3 Copper
Project.
Mining Assumptions
The T3 Copper Project is proposed to be mined by conventional
open pit mining methods and equipment. The Ore Reserve is supported
by pit optimisation, pit design and production scheduling,
developed as part of the FS.
The selected mining method, design and extraction sequence suit
the T3 orebody characteristics, minimise dilution and ore loss,
defer waste movement, conform to maximum rates of vertical mining
advance and utilise planned process plant capacity.
The open pit mine schedule is based on realistic mining
productivity factors, and material movements that take operational
realities into consideration.
The mining operating costs are supported by contractor estimates
based on a detailed request for quotation. These estimates were
reviewed and validated internally by a shadow estimation process.
The shadow estimate costs were used in the financial model and
aligned closely to costs assumed in the earlier pit optimisation
process.
Geotechnical Modelling
Geotechnical modelling completed by independent consultant SRK
Consulting (UK) is based on field logging and laboratory testing of
selected diamond drill core samples from purpose drilled
geotechnical diamond drill holes. The open pit designs are based on
the recommended geotechnical design parameters and assume dry
slopes based on the assumption of adequate dewatering and/or
depressurisation ahead of mining.
The geotechnical parameters were applied uniquely to each of the
following three zones:
o Top 20m (unconsolidated sands and weathered material) has an
Overall Slope Angle ("OSA") of 27 degrees;
o Relatively shallow footwall OSA of 35 degrees, effectively
following the base of the ore zone below approximately the first
100 vertical metres of mining; and
o Hanging wall OSA is considerably steeper at 57 degrees.
Final walls are established on the footwall with the initial
stages of mining. The likely performance of the hanging wall zone
can be assessed by the interim hanging walls of the pit stages and
adjusted as required.
Hydrogeology
A separate hydrogeological report was prepared by independent
consultants Knight Piesold Consulting which considered dewatering
requirements (specifically targeting the Stage 1 pit), drawdown
impacts on surrounding farms and capacity of the water supply
borefield. The study identified that the groundwater at T3 is
fresh, slightly alkaline and largely conforms to the in-country
drinking water guidelines and has the potential to meet the T3
Copper Project water demand.
Mining Ore Loss and Dilution
Mining ore loss and dilution modifying factors were implemented
by regularising the mineral resource model to a Selective Mining
Unit (SMU) with a block size of 5mE x 5mN x 2.5m RL. Sensitivity
analysis utilising various SMU block sizes was completed and
checked against a 1m skin around a 0.4% copper grade shell. An ore
loss of approximately 9% and a diluted tonnage of approximately 8%
was realised. The impact of ore loss and dilution has resulted in a
2.7% loss of contained copper metal within the reserve.
Cut-off grade
The final pit design is based on a conservative Whittle pit
shell defined by a revenue factor of 0.85 (85% of the assumed metal
prices). The production schedule has targeted utilising a copper
cut-off grade of 0.25%, whereas the marginal break-even grade
ranges between 0.18% to 0.20% copper, dependent on silver
credits.
Low grade is classified as material between the marginal
break-even grade and 0.25% copper grade. Low grade stockpiles will
be utilised to maintain process plant feed rates during periods of
high waste movement and to maintain a steady total material
movement between periods.
Infrastructure
The proposed mine site layout includes a single pit with haul
roads connected to a single waste rock dump, mineralised waste
dump, low grade stockpile and a run of mine ("ROM") pad. There are
surface water diversion channels, surface dewatering bores, light
and heavy vehicle workshop facilities, explosives storage, a
planned 3.0Mtpa processing plant, supply facilities, technical
services facilities, and administration facilities.
The workforce will either reside locally in nearby townships or
commute and reside at a dedicated camp in Ghanzi during rostered
days on. The current accommodation camp consists of a 40-person
self-contained unit accommodation camp. The camp will be expanded
to accommodate 400 people, with additional temporary capacity
during construction.
To meet the initial processing and dewatering requirements for
the Stage 1 pit, a minimum of one production bore and 14 pit
dewatering bores are required, of which eight have already been
installed. Pumping tests will be undertaken on all future bores and
longer-term pumping tests will be undertaken on selected existing
bores after FS completion and before commencing pit dewatering and
pre-stripping activities.
The Botswana Government has awarded contracts for the extension
of a 220kV grid power transmission line along the A3 highway that
joins Toteng and Ghanzi, approximately 14km by road from the T3
Copper Project, scheduled to be available during the first quarter
of 2020. MOD has maintained regular communication with the Botswana
Power Corporation ("BPC") to confirm the scheduled availability of
power. MOD plan to utilise grid power as the primary power supply
for the T3 Copper Project.
Metallurgical and Processing Assumptions
The process plant is designed for an annual average throughput
of 3.0Mtpa. The copper recovery plant and associated service
facilities will process ROM ore delivered to a single stage primary
crusher. The crushed ore will be stockpiled and fed to a two-stage
grinding circuit using SAG and ball milling. Copper minerals in the
ground ore will be concentrated in a conventional copper flotation
circuit, made up of roughing, regrind and a single stage of
cleaning. Concentrate from the cleaning stage will be thickened
then filtered on site prior to transporting to Walvis Bay in
Namibia. From Walvis Bay the concentrate will be shipped to
third-party smelters.
Grinding and flotation test-work has established mill design
parameters and copper recovery estimates for the FS. The mill will
process a total of 34.4Mt over 11 years at an average grade of 1.0%
copper and 13.2g/t silver. Recoveries for copper and silver are
92.9% and 88.0% respectively, averaged over the mine life.
Tailings from the roughing and cleaning stages will be pumped to
the engineered, HDPE lined, tailing storage facility ("TSF")
located south of the proposed mine. The TSF is designed to store
approximately 34.4Mt of conventional thickened tailing.
Cost and Economic Assumptions
The capital cost estimate for the development of the T3 Copper
Project has an accuracy level of +/-15%.
Data for these estimates have been obtained from numerous
sources including:
o Feasibility level engineering design
o Mine plan
o Topographical information obtained from site survey
o Geotechnical investigation
o Budgetary equipment proposals
o Budgetary unit costs from local contractors for civil,
concrete, steel and mechanical works
o Data from recent completed similar studies and projects
o A preliminary mine closure plan (with costs developed from
first principles)
The operating cost estimate includes all costs associated with
operating the mine, process plant and general and administrative
functions and has been developed to an accuracy level of
+/-15%.
The operating costs were determined from mining contractor and
supplier quotes and built using first principles, and are developed
using inputs from numerous sources including:
o Supplier quotations for processing consumables and maintenance
rates
o Detailed scheduling of the fleet requirements
o Grinding power requirements derived from comminution
testwork
o Reagent consumption from metallurgical testwork
o Reagent & consumable costs from supplier quotations
o Logistics & transport costs from supplier quotations
o Manning levels developed from typical organisation charts and
work rosters
o Personnel salaries & overheads sourced from the Ghanzi
region
o Previous study assessments
Concentrate treatment and refining charges (TC/RC) are derived
on the basis of recent annual benchmark TC/RCs as agreed between
large mining and large smelting groups and as adopted by the
industry, less applicable discounts. An allowance has been made for
all government royalties, including 3% for copper and 5% for silver
on a net smelter return basis.
A long-term copper price forecast of US$3.08/lb (in real 2019
terms) is applied in the financial modelling for the Ore Reserve
estimation process. This price forecast is derived from the latest
consensus Bloomberg pricing from more than 30 financial
institutions, with the average price point selected for the
financial analysis.
Net present value ("NPV") and free cashflow analysis of the Ore
Reserve is based on assumed commodity prices and other current key
assumptions, which indicates the project is financially viable and
capable of generating strong returns.
Sensitivity analysis indicates the project is most sensitive to
copper price, copper grade and copper recovery.
Social and Environmental
Studies and investigations by Karunya Consulting and Loci
Environmental Consulting have confirmed that there were no rare,
threatened or priority conservation significant flora or vegetation
communities identified during the Environmental and Social Impact
Assessment. Habitats suitable for supporting free roaming wildlife
including several conservation significant species were identified
and mitigation of impacts by mining on these during operations have
been adequately addressed in the Draft Environmental and Social
Impact Assessment submitted to the Department of Environmental
Affairs on 24 December 2018.
Knight Piesold Consulting conducted geochemical test work on
tailings, waste rock and mineralised waste and expects that the
majority of waste rock characterised will be non-acid forming and
not prone to leaching. Further column test work to adequately
assess leachability of heavy metals is required on mineralised
waste (containing elevated levels of lead and zinc mineralisation).
Any materials ultimately identified as potentially acid forming
and/or prone to metal leaching drainage will be managed through
detailed engineering design of the waste storage facility if
required.
T3 Mineral Resource
In July 2018, MOD released an updated Mineral Resource estimate
for the T3 Copper Project. The March 2019 Ore Reserve update
statement is a subset of these previously announced resources. See
the MOD announcement dated 16 July 2018 for full details of the
Resource estimate.
T3 Revised Mineral Resource - different cut-off grades (16 July
2018)
JORC Category Cut-off Tonnes Grade Grade Contained Contained
Cu (%) Cu (%) Ag (g/t) Cu (Kt) Ag (Moz)
Indicated 0.25 50,040,000 0.92 13.0 461.3 20.95
-------- ----------- -------- ---------- ---------- ----------
0.4 36,631,000 1.14 15.8 417.0 18.60
-------- ----------- -------- ---------- ---------- ----------
0.5 27,139,000 1.38 19.3 374.5 16.82
-------- ----------- -------- ---------- ---------- ----------
1 14,154,000 2.06 31.4 291.9 14.30
-------- ----------- -------- ---------- ---------- ----------
1.5 10,962,000 2.29 35.8 250.7 12.61
-------- ----------- -------- ---------- ---------- ----------
Inferred 0.25 27,667,000 0.68 10.3 187.3 9.18
-------- ----------- -------- ---------- ---------- ----------
0.4 23,524,000 0.74 11.0 173.3 8.30
-------- ----------- -------- ---------- ---------- ----------
0.5 19,884,000 0.79 11.5 156.9 7.35
-------- ----------- -------- ---------- ---------- ----------
1 3,511,000 1.58 21.8 55.6 2.46
-------- ----------- -------- ---------- ---------- ----------
1.5 1,640,000 2.04 29.3 33.5 1.55
-------- ----------- -------- ---------- ---------- ----------
TOTAL 0.25 77,706,000 0.83 12.1 648.6 30.14
-------- ----------- -------- ---------- ---------- ----------
0.4 60,155,000 0.98 13.9 590.4 26.90
-------- ----------- -------- ---------- ---------- ----------
0.5 47,023,000 1.13 16.0 531.5 24.17
-------- ----------- -------- ---------- ---------- ----------
1 17,665,000 1.97 29.5 347.6 16.77
-------- ----------- -------- ---------- ---------- ----------
1.5 12,602,000 2.25 34.9 284.2 14.16
-------- ----------- -------- ---------- ---------- ----------
The technical information contained in this disclosure has been
read and approved by Mr Nick O'Reilly (MSc, DIC, MAusIMM, FGS), who
is a qualified geologist and acts as the Competent Person under the
AIM Rules - Note for Mining and Oil & Gas Companies. Mr
O'Reilly has visited the T3 site and reviewed MOD's drilling and
sampling protocols and procedures. Mr O'Reilly is a Principal
consultant working for Mining Analyst Consulting Ltd, which has
been retained by Metal Tiger to provide technical support.
The Company currently holds 31,838,393 MOD ordinary shares,
representing approximately 10.48% of MOD's issued share capital;
40,673,566 unquoted options with a nil exercise price expiring on
15 November 2021; and 154,167 options over MOD ordinary shares,
each exercisable at AU$0.60 per MOD ordinary share on or before 15
April 2019. In addition, Metal Tiger holds a 30% interest in
Tshukudu Exploration (Pty) Ltd, via Metal Capital Exploration
Limited, with MOD holding the remaining 70%. For further
information on this JV, please see the Company's announcements of
18 July 2018 and 16 November 2018.
For further information on the Company, visit:
www.metaltigerplc.com:
Michael McNeilly (Chief Executive Officer) Tel: +44 (0)20 7099
0738
Mark Potter (Chief Investment Officer)
Richard Tulloch Strand Hanson Limited (Nominated Tel +44 (0)20 7409
James Dance Adviser) 3494
Jack Botros
Nick Emerson SI Capital (Broker) Tel: +44 (0)1483
413 500
Gordon Poole Camarco (Financial PR) Tel: +44 (0)20 3757
James Crothers 4980
Monique Perks
Notes to Editors:
Metal Tiger plc is listed on the London Stock Exchange AIM
Market ("AIM") with the trading code MTR and invests in high
potential mineral projects with a base, precious and strategic
metals focus.
The Company's target is to deliver a high return for
shareholders by investing in significantly undervalued and/or high
potential opportunities in the mineral exploration and development
sector. The Company's key strategic objective is to ensure the
distribution to shareholders of major returns achieved from
disposals. Metal Tiger has two investment divisions, Direct
Equities and Direct Projects.
The Direct Equities division invests in undervalued natural
resource companies listed on AIM, the ASX and the TSX. Through the
trading of equities and warrants, Metal Tiger seeks to generate
cash for investment in the Direct Projects division.
Metal Tiger's Direct Projects division is focused on the
development of its key project interests in Botswana, Spain and
Thailand. In Botswana, Metal Tiger, through its 10.48% interest in
MOD Resources Limited and related JV, has a growing interest in the
large and highly prospective Kalahari copper/silver belt. In Spain,
the Company has tungsten and gold interests in the highly
mineralised Extremadura region. In Thailand, Metal Tiger has
interests in two potentially near-production stage lead/zinc/silver
mines as well as licences, applications and critical historical
data covering antimony, copper, gold, lead, zinc and silver
opportunities.
The Company actively assesses new investment opportunities on an
on-going basis and has access to a diverse pipeline of new
opportunities in the natural resources and mining sectors. For
pipeline opportunities deemed sufficiently attractive, Metal Tiger
may invest in the project or entity by buying publicly listed
shares, by financing privately and/or by entering into a joint
venture.
Background information on the T3 Project
The T3 Project is located on the Kalahari Copper Belt in
northern Botswana and is a Copper/Silver Project. T3 is located
within the central part of the T3 Dome Complex (approximately
1,000km(2) ), which is the focus of rapidly increasing exploration
activity undertaken by MOD. Two significant resources have been
discovered to date within the T3 Dome: T1 (Mahumo deposit - 100%
MOD) and T3 (100% MOD).
The T3 Deposit was discovered in March 2016 when a reverse
circulation ("RC") drill hole intersected 52m @ 2.0% Cu and 32g/t
Ag from shallow depth. The maiden T3 JORC (2012) compliant Mineral
Resource Estimate was announced on 26 September 2016 with the first
Resource upgrade announced on 24 August 2017. The results of a
Scoping Study for an open pit mine at T3 with a 2Mtpa processing
plant, an indicative mine life of 10 years and an average
production rate of 21,800tpa of copper and 665,000oz pa of silver
was released on 6 December 2016. Work on a Pre-Feasibility Study
(PFS) commenced in January 2017 and additional deeper copper
mineralisation was discovered below the T3 Resource in February
2017.
The Phase 2 drilling at the T3 Copper/Silver Deposit commenced
on 7 August 2017, with approval granted for the recommencement of
both diamond core ("DC") and RC drilling at the T3 Project and its
vicinity, through to December 2018 (which has subsequently been
extended to December 2020). This included 90 DC drill holes
designed to infill the Resource and test for possible extensions.
The objective of the infill programme is to increase geological
confidence and upgrade categorisation of the T3 Resource. The
programme also included grid drilling to investigate the potential
for an underground Resource down-dip and along strike from the
planned open-pit, and to investigate geophysical targets. Drilling
approval has been granted for the wider T3 Dome with the acceptance
of the T3 Dome EMP announced on 3 April 2018.
The results of the T3 Open Pit Pre-Feasibility Study were
announced on 31 January 2018; the revised and upgraded T3
Copper/Silver Deposit Mineral Resource Estimate was announced on 2
July 2018; a Resource re-classification announced on 16 July 2018;
and an Ore Reserve upgrade on 25 March 2019.
The T3 Open Pit Feasibility Study, towards a decision to mine,
is currently underway.
Outside of the T3 Project licence area, Tshukudu Exploration,
the Metal Tiger (30%) and MOD (70%) joint venture, continues to
conduct regional exploration on the highly prospective Kalahari
Copper Belt.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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